Gahanna-Jefferson Local School Dist. Bd. of Edn. v. Zaino

• Decision Date: 26 September 2001
• Docket Number: No. 00-983.,00-983.
• Citation: 754 NE 2d 789,93 Ohio St.3d 231
• Court: Ohio Supreme Court
• Parties: BOARD OF EDUCATION OF GAHANNA-JEFFERSON LOCAL SCHOOL DISTRICT, APPELLANT, v. ZAINO, TAX COMMR., ET AL., APPELLEES.

93 Ohio St.3d 231

754 NE 2d 789

BOARD OF EDUCATION OF GAHANNA-JEFFERSON LOCAL SCHOOL DISTRICT, APPELLANT, v. ZAINO, TAX COMMR., ET AL., APPELLEES.

No. 00-983.

Supreme Court of Ohio.

Submitted February 28, 2001.

Decided September 26, 2001.

Green & Hughes Co., L.P.A., and Martin J. Hughes III, for appellant.

Betty D. Montgomery, Attorney General, and Phyllis J. Shambaugh, Assistant Attorney General, for appellee Tax Commissioner.

Thompson, Hine & Flory, L.L.P., and Peter D. Welin, for appellee Duke Realty, Inc.

COOK, J.

R.C. 3735.65 et seq. allows cities and counties to grant tax exemptions for real property located within a designated Community Reinvestment Area ("CRA"). This case asks whether the Tax Commissioner ("commissioner") has jurisdiction under R.C. 5715.27(E) to hear a complaint challenging the continued exemption of certain property located in a CRA. The Board of Tax Appeals ("BTA") answered this question in the negative. But because nothing in R.C. 3735.65 et seq. necessarily undermines the general authority granted to the commissioner under R.C. 5715.27(E), we reverse.

I

Appellee Duke Realty, L.P. ("Duke") owns real property located within an area of Columbus, Ohio, designated as a CRA. Appellant Board of Education of the Gahanna-Jefferson Local School District ("Gahanna-Jefferson") filed a complaint with the commissioner under R.C. 5715.27(E), asserting that the property in question no longer qualified for an exemption granted under R.C. 3735.65 et seq. The commissioner dismissed the complaint for lack of jurisdiction, concluding that he lacked the statutory authority to participate in the process of exempting from taxation property located within a CRA. The BTA affirmed the commissioner's decision, relying almost exclusively on its recent decision in Vandalia-Butler City School Dist. Bd. of Edn. v. Tracy (Apr. 14, 2000), B.T.A. Nos. 98-M-358 and 98-M-359, unreported. Although the BTA acknowledged that Gahanna-Jefferson "`may have a remedy by appeal to a court of common pleas'" under R.C. 3735.70, it found "`no reference within R.C. 3735.67 et seq. which directs the commissioner to administer the incentives permitted to CRA's,'" quoting Vandalia-Butler. Accordingly, the BTA found that the commissioner lacked jurisdiction to hear Gahanna-Jefferson's complaint against the continued exemption of Duke's property.

The cause is now before this court upon an appeal as of right.

II

When reviewing an appeal from the BTA, we must ascertain whether the BTA's decision is reasonable and lawful. Columbus City School Dist. Bd. of Edn. v. Zaino (2001), 90 Ohio St.3d 496, 497, 739 N.E.2d 783, 785. Although we will generally not disturb the BTA's determinations on the weight of evidence and credibility of witnesses, we will not hesitate to reverse a BTA decision that is based on an incorrect legal conclusion. See SFZ Transp., Inc. v. Limbach (1993), 66 Ohio St.3d 602, 604, 613 N.E.2d 1037, 1039. In this case, we must decide whether the BTA correctly interpreted R.C. 3735.65 et seq. as depriving the commissioner of jurisdiction over a complaint filed under R.C. 5715.27(E) that seeks revocation of a tax exemption for property in a CRA.

R.C. 3735.65 et seq.

In R.C. 3735.65 et seq., the General Assembly has instituted a property tax incentive program that promotes the construction and remodeling of commercial, industrial, and residential structures in CRAs. Before property may be exempted from taxation under this program, the legislative authority of a municipality or county must adopt resolutions designating the boundaries of a CRA. R.C. 3735.66.¹ The legislative authority must also designate a housing officer to administer the CRA program. Id. New or remodeled residential, commercial, or industrial property located within a CRA is eligible for a partial or total tax exemption. Id.

To obtain an exemption for new or remodeled property located in a CRA, the owner must file an application with the housing officer designated by the legislative authority. R.C. 3735.67. If the property is commercial or industrial, the legislative authority and the owner must also enter into a written agreement before new construction begins. R.C. 3735.67(A) and 3735.671(A). Unless certain conditions in R.C. 3735.671(A)(2) or (A)(3) apply, the school board must be notified of the exemption and, in the case of commercial or industrial property, must approve the written agreement between the legislative authority and the owner. R.C. 3735.67(A) and 3735.671(A)(1). After the housing officer has determined that all the requirements for an exemption have been met, he or she forwards the application to the county auditor with information regarding the percentage and duration of the exemption. R.C. 3735.67(C).

Besides the authority granted by R.C. 3735.67, the housing officer also has the power to revoke a CRA exemption after the first year if "the housing officer finds that the property has not been properly maintained or repaired due to the neglect of the owner." R.C. 3735.68. In addition, if the property is commercial or industrial, the legislative authority of the county or municipality may revoke the exemption if it finds that (1) the owner "has materially failed to fulfill its obligations" under the written agreement entered into pursuant to section R.C. 3735.671 or (2) the owner violated R.C. 3735.671(E).² Id.

The CRA statutory scheme also contains an appeals process. R.C. 3735.70 allows "[a]ny person aggrieved under sections 3735.65 to 3735.69 of the Revised Code" to appeal to the CRA housing council, an administrative body appointed by local authorities under R.C. 3735.69. R.C. 3735.70 also provides for further appeals "from a decision of the council to the court of common pleas of the county where the area is located."

R.C. 5715.27

In contrast to R.C. 3735.65 et seq.'s specific applicability to tax exemptions for property in a CRA, R.C. 5715.27 is a general statute relating to the granting and revoking of exemptions from real property taxes. The statute allows property owners to file applications for tax exemption with the commissioner, who must then notify the boards of education of these applications if requested to do so. See R.C. 5715.27(A) and (B). A board of education may then "file a statement with the commissioner * * * indicating its intent to submit evidence and participate in any hearing on the application." R.C. 5715.27(C). The commissioner may not act on the application for exemption before the board of education's deadline for submitting this statement unless certain statutory exceptions apply. R.C. 5715.27(D). One of these exceptions in R.C. 5715.27(D) expressly refers to a CRA exemption statute. At the property owner's request, the commissioner may act upon an exemption application prior to the date specified in R.C. 5715.27(C) "in the case of exemptions authorized by section 725.02, 1728.10, 3735.67, 5709.41, 5709.62, or 5709.63 of the Revised Code." (Emphasis added.) R.C. 5715.27(D). Thus, even though R.C. 3735.65 et seq. does not mention the commissioner, R.C. 5715.27(D) contemplates some involvement by the commissioner in the process of exempting CRA property from taxation.

R.C. 5715.27 also contemplates commissioner involvement in a decision to revoke a property tax exemption. R.C. 5715.27(E) provides that "[a] complaint may also be filed with the commissioner by any person, board, or officer authorized by section 5715.19 of the Revised Code to file complaints with the county board of revision against the continued exception of any property." (Emphasis added.) R.C. 5715.27(F) empowers the commissioner to decide the issue and to certify his or her findings to the county auditor.

Reconciling the Statutes

There is no dispute that Gahanna—Jefferson is a "board" that is authorized by R.C. 5715.27(E) to file a complaint against the continued exemption of property. And because R.C. 5715.27(E) allows a complaint to be filed against the continued exemption of any property, Gahanna—Jefferson argues that it may file a complaint under this provision against property within a CRA that is exempted under R.C. 3735.65 et seq. Conversely, the appellees contend that R.C. 5715.27(E) is inapplicable because R.C. 3735.65 et seq. provides specific and exclusive procedures for revoking an exemption previously granted to property within a CRA. And because these specific provisions in R.C. 3735.65 et seq. make no mention of commissioner involvement, the appellees contend that R.C. 5715.27(E) cannot grant jurisdiction to the commissioner over Gahanna—Jefferson's complaint.

The relevant starting point for our analysis is R.C. 1.51, which states:

"If a general provision conflicts with a special or local provision, they shall be construed, if possible, so that effect is given to both. If the conflict between the provisions is irreconcilable, the special or local provision prevails as an exception to the general provision, unless the general provision is the later adoption and the manifest intent is that the general provision prevail."

When two statutory provisions are alleged to be in conflict, R.C. 1.51 requires us to construe them, where possible, to give effect to both. Schindler Elevator Corp. v. Tracy (1999), 84 Ohio St.3d 496, 499, 705 N.E.2d 672, 674

. "Only where the conflict is deemed irreconcilable does R.C. 1.51 mandate that one provision shall prevail over the other." (Emphasis added.) United Tel. Co. of Ohio v. Limbach (1994), 71 Ohio St.3d 369, 372, 643 N.E.2d 1129, 1131. Our comparison of R.C. 3735.65 et seq. and 5715.27(E) fails to convince us that these statutes are irreconcilable.

As noted above, R.C. 3735.68 explains the circumstances under which a housing officer or local legislative authority may revoke a CRA exemption. The statute does not, however, contain a provision authorizing a board of education to commence proceedings seeking to revoke a CRA exemption. The appellees view this omission...